Washington State's Chamber

President's Perspective

Friday, August 24

Federal Health Care Law: A String of Broken Promises

President Obama’s national health care law was passed with lofty promises but no details. Few lawmakers read the 2,000+ page bill before voting on it, but supporters promised it would expand access to health care, cut health care costs and — most importantly — allow people to keep their coverage and their doctors if they wished.

Those have turned out to be broken promises.

First broken promise: You can keep your health plan and doctor if you like.

President Obama repeatedly assured Americans that, if they liked their health plan and their doctor, they could keep them. That’s not the case.

The law defines what the government considers an acceptable insurance policy. If yours doesn’t qualify, it’s gone. It expressly eliminates popular high-deductible health plans for small employers. In addition, the law pressures employers to drop coverage for their employees and shift those people into government health exchanges.

And if you have excellent insurance coverage, you will be punished. The law imposes a 40 percent tax on so-called “Cadillac” insurance policies. So, if you have good insurance coverage, you can keep it — but it will cost you.

Can’t afford good insurance coverage? The law may not help you as promised.

In August, the New York Times reported that because of the way the Internal Revenue Service defines “affordable coverage” under the law, untold numbers of middle-class families who can’t afford employer-sponsored coverage will nonetheless be ineligible for government subsidies.

Another broken promise: Small employers will be eligible for a tax credit to help provide insurance for their workers.

As it turns out, the credit doesn’t work for 96 percent of eligible employers. According to the Associated Press, the Government Accounting Office found that the credit applies to only the smallest employers paying the lowest wages, and the tax credit isn’t enough to encourage them to provide coverage.

Speaking of taxes, beginning in January of 2013 — right after the presidential election — new health care taxes and fees kick in totaling more than $250 billion over 10 years.

For example, the law increases Medicare taxes and imposes $60 billion in fees on insurance companies over 10 years — costs that will be passed onto consumers in higher insurance premiums. The law also imposes billions in fees and taxes on drug companies and high-tech medical equipment — further increasing health care costs — while reducing billions of dollars in tax benefits for individuals for medical expenses and tax-deferred health care contributions.

The law also cuts $500 billion from Medicare over 10 years by reducing support for the popular Medicare Advantage program, cutting Medicare home health care payments and further reducing reimbursements to doctors and hospitals.

State taxpayers will also be on the hook for hundreds of billions of dollars in additional Medicaid costs.

The federal health care law promised to cover millions of uninsured by expanding Medicaid, which is funded jointly by the federal governments and states. The recent Supreme Court decision gutted that promise when it ruled states couldn’t be forced to take part. Even though the federal government promises to pay for the expansion — for now — many governors fear the feds will gradually shift the crushing cost burden to state taxpayers.

Apparently that fear is well-founded. Forbes reports that during deficit-reduction talks last year, President Obama proposed reducing federal funding for the Medicaid expansion by $100 billion over 10 years, with the states picking up the difference.

And while the new law provides health care coverage for millions of uninsured, they may not be able to find a doctor. In a recent survey, Jackson Healthcare, one of the nation’s largest medical staffing companies, found that more than one-third of the nation’s doctors are considering quitting medicine in the next 10 years.

Congress passed the federal health care law without knowing what was in it. Now that we do know, it will take major legislative surgery to cure what ails it.

About the AuthorDon Brunell is the president of the Association of Washington Business. Formed in 1904, the Association of Washington Business is Washington’s oldest and largest statewide business association, and includes more than 7,900 members representing 700,000 employees. AWB serves as both the state’s chamber of commerce and the manufacturing and technology association. While its membership includes major employers like Boeing, Microsoft and Weyerhaeuser, 90 percent of AWB members employ fewer than 100 people. More than half of AWB’s members employ fewer than 10. For more about AWB, visit www.awb.org